'This Week' Transcript: Goolsbee, Brown & Corker

TAPPER: Good morning, everyone. Tomorrow, the Senate is scheduled
to hold its first vote on the biggest overhaul in decades of the
nation's financial system, changes that could impact your savings, your
pension, maybe even your job. This as a big Wall Street investment bank
comes under attack on Tuesday. Executives from Goldman Sachs, which is
already facing government accusations of fraud, will testify before a
Senate committee investigating whether the firm profited from the
massive housing crash at the expense of its clients.

Joining me this morning, three key players in the middle of this
storm. With me here, is Austan Goolsbee from the President Obama's

Council of Economic Advisers. In Chattanooga, we have Tennessee
Republican Senator Bob Corker, and in Cincinnati, Democratic Senator
Sherrod Brown, both key members of the Senate Banking Committee.
Gentlemen, welcome.

GOOLSBEE: Thanks for having us.

CORKER: Good morning. Good to be with you.

TAPPER: Before we start with Wall Street reform, I do want to talk
about these Goldman Sachs memos, these emails that the Senate Permanent
Subcommittee on Investigations has released, emails that seem to show
executives rejoicing as the housing market crashed, and in fact, they
seem to contradict the impression given by Goldman Sachs that they lost

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money as the mortgage related investment crash happened. In a private
email, Goldman CEO Lloyd Blankfein wrote in November of 2007, "Of course
we didn't dodge the mortgage mess. We lost money, then made more than
we lost because of shorts."

Senator Brown, I want to ask you. What do these emails signify to you?

BROWN: Well, these emails signify that there are all kinds of
conflicts of interest on Wall Street, that there are -- that Wall
Street, while working for its clients and working against its clients in
the same sort of bundled toxic securities, and that's why we need the

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Volcker rule. That's why we need really strong reform that will
separate the proprietary trading from banking functions. I think that
says it more articulately and more forcefully, that example, than
anything we've seen so far.

TAPPER: Senator Corker, doesn't Senator Brown have a point? This
is exactly why people think that proprietary trading, that is when a
bank uses its own money to invest, should not be the same, it should not
be in the same firm as trading for commercial banking, for clients?
That there is an inbred conflict of interest there.

CORKER: Well, I can understand the sentiment. I know that
certainly the emails do not read well. I look forward to seeing what
the SEC investigation brings forth, and the Senate investigation through
this subcommittee brings forth. At the end of the day, though, some of
that has to do with making markets. I am in no way defending sort of
the attitude expressed in the emails, but I think we're better off
waiting to see exactly what has taken place.

I think, you know, at the end of the day, instruments are set up on
Wall Street. People take either side of it. There are some conflicts
of interest that can exist and do need to be looked at, but I'd rather
wait and see how this investigation unfolds before making any judgments.